Playing games with home insurance in NC

When a hurricane hits, property damage can be astronomical. Insurers may face millions, even billions, in claims. But they’ve hedged their bets. Premiums more than cover the risk.

The insurance industry is asking the state insurance commissioner to raise maximum premium rates because a major hurricane could prove devastating.

Absent any such storm, that’s straight profit. You can’t blame them for asking. But the state should hold the line.

We haven’t had a big storm in years, and there’s no reason to expect one soon. It could happen but doesn’t seem likely.

The most expensive hurricane in North Carolina was Floyd, which did $7.9 billion in damages (dollars adjusted for inflation). That was 1999. Since then, only Hurricane Irene in 2011 crossed the half-billion mark.

Meanwhile, the state’s insurance industry is playing games. The rate caps are a creative fiction. A legal catch allows companies to coerce property owners into signing an agreement accepting rates up to two and a half times the supposed cap.

Let’s hold the line on rates and ask lawmakers to close this loophole. The insurance business involves risks that must be covered. But if it wasn’t already profitable, these companies wouldn’t be doing business here.